Essays in applied economics: evidence from Brazil

Abstract

This thesis contains three essays.
In the ﬁrst essay, I examine whether a temporary policy can aﬀect long-run house hold behavior. I look at evidence from a nine-month compulsory rationing imposed on
Brazilian households’ electricity use in 2001, exploiting diﬀerences in the policy’s implementation across regions as a quasi-experiment to test its short-and long-run impacts on
households’ electricity consumption patterns. I ﬁnd that the rationing program led to a
persistent reduction in electricity use of 14% even ten years later. Unique household level
microdata on appliance ownership and consumption habits suggest that the main source
of persistence is changes in the utilization of electricity services, rather than technology
adoption.
In the second essay, we examine the eﬀects of China’s recent emergence into the world
economy in local labour markets in Brazil. Much of the literature have viewed China
as a competitor. However, China is also an increasingly large consumer of goods produced abroad, and an increasing share of its import demand is for primary goods. Using
census data, we compare trends in migration, unemployment, employment structure (primary/manufacturing/services), informality and participation on Bolsa Família program
in areas aﬀected by the ‘China competition shock’ and the ‘China demand shock’. We
ﬁnd signiﬁcant and heterogeneous eﬀects from these two ‘shocks’.
In the third essay, we employ an uniﬁed theoretical framework to structurally estimate
the eﬀect of changes within China on the production in Brazil and in the rest of the
world. Based on the Ricardian model of trade of Costinot et al. (2012), we perform
counterfactuals exercises to analyze how countries and industries in Brazil would have
performed in the absence of the recent Chinese ascension. Results suggest that changes
in China’s comparative advantage hampered manufacturing sector abroad. We ﬁnd no
support for the idea of China demand (taste) shock towards raw materials.